What does the sector need to think about following the Presidents Club revelations, and how should we respond?

Angela Kail

The charity sector has been here before, tied up in high-profile scandals of how organisations operate and stories about a minority putting the majority in a bad light in the eyes of the public.

Unlike with previous fundraising scandals, where for-profit agencies were involved and members of the public were bombarded with unwanted literature and emails, this time it was all about high-end fundraising dinners.

But the principle has to be the same: charities cannot just take money from wherever it comes just because it will help them to pursue their cause. They need to look at the organisation offering the funding and how it raises it, and decide if that is consistent with their values and mission.

Gosh and the other charities involved in this case need to look hard at what due diligence they actually did. This event has been running for 33 years. It has attracted a sufficient reputation for sleaze that undercover journalists have decided to have a crack at it. Charities need to be on the case here.

In this case the organisers of the fundraiser, the Presidents Club, is itself a charity. A cursory look at its accounts should have raised concerns. There seems to be no strategy to the grants it pays out. The fundraising ratio is awful, especially if you assume that everyone giving was a higher-rate tax payer and the donations therefore included a lot of Gift Aid. A bit of due diligence would have shown that there are no women on the board of trustees.

The charity used charitable expenditure to run an event where women were sexually harassed and asked to sign non-disclosure agreements. Is this the kind of organisation we want the public to think of when they think of "charity"?

And until recently the dinner was barely covering its costs. The accounts suggest the 2014 Presidents Club annual dinner brought income of £694,000 but cost £673,000. This is not effective and not achieving impact for beneficiaries. It looks very much like an excuse for a jolly. So even if there had been no groping or propositioning, no weird men-only invite, the event would still be questionable as a worthwhile charitable endeavour.

This time philanthropy is implicated too

This event is likely to be damaging to the sector in many different ways. At NPC we work with many philanthropists and know that this isn’t normal behaviour from the great bulk of philanthropists. Most rich people give because they see a need, because they have a connection to the cause. Not because they have got drunk and bid for plastic surgery to "spice up" their wife.

There is a lot of good, strategic, effective philanthropy out there, but it often flies under the radar. Yes, we need to do better—and there are plenty of rich people who don’t give and others who could easily give more – but philanthropy is an important part of our civil society. More than ever we need to be shining a light on those philanthropists who have been generous and fervent supporters of the charity sector, or who are trying to make long-term changes to how our society works.

We know philanthropy can be an agent for change and a great force for good in the world. This happens when people put not just their money, but also their beliefs, knowledge and assets behind the change they are trying to make.

This event is not typical of our sector, and it and should not be able to hide behind the respectability of the word "charity".

The issue of trust must be tackled with real conviction

But here we are again, with trust in charities at risk.

Trust will remain fragile until it is dealt with in earnest, not in a piecemeal, reactive way.

Charities are under pressure to keep the money coming in to run vital services during really tough times. But destroying trust costs in the long run, so it’s not enough to make tweaks in whichever specific area happens to be under scrutiny. It’s about looking as a whole at how an organisation is balancing income with integrity.

The charities involved need to come out and condemn what has happened, but must also explain how they will avoid it happening again. And as the eyes of the national press turn back to charities and philanthropists, the sector must ensure its house is in order.

Expert Hub

When a property is being constructed, VAT is charged at the standard rate. But if you're a charity, health body, educational institution, housing association or finance house, the work may well fall into a category that justifies zero-rating - and you could make a massive saving

Get our bulletins. Read more articles. Join a growing community of Third Sector professionals